The Gains From Takeover Deregulation: Evidence From The End Of Interstate Banking Restrictions  

Oleh:

Brook, Yaron ; Hendershott, Robert ; Lee, Darrel

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 53 no. 6 (Dec. 1998), page 2185-2205.
Fulltext: p 2185.pdf (100.5KB)

Isi artikel

This paper uses interstate banking deregulation to explore the benefits of takeover deregulation and how these benefits are distributed across different firms. We find large and significant abnormal returns around the Interstate Banking and Branching Efficiency Act of 1994 which imply it created $85 billion of value in the banking industry. Consistent with an active market for corporate control allowing beneficial consolidation and providing needed discipline, there is a strong negative relationship between banks’ abnormal returns and their prior performance. Consistent with managerial entrenchment limiting takeover discipline, banks with higher insider ownership, lower outside block ownership, and0or less independent boards have lower abnormal returns.

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